Selling products and services to colleges and universities is a big business. In 2018-19, degree-granting postsecondary institutions in the United States spent $632 billion (in current dollars). Total expenses were $401 billion at public institutions, $219 billion at private nonprofit institutions, and $12 billion at private for-profit institutions (National Center for Education).
Yet even though many institutions have made a commitment to supplier diversity, a tiny percentage of contracts are awarded to diverse suppliers. A WBGH report in 2020 noted that “out of nearly 700 active contracts awarded by a big college purchasing co-op in Massachusetts 2% went to minority-owned businesses certified by the state.” 2%: Number of Active Contracts Going to Minority-Owned Businesses
Why do diverse business owners, especially in under-served communities, feel so frustrated by higher education procurement policies? What makes it difficult for them to navigate procurement procedures?
To help answer these questions, a faculty team from Northeastern University’s College of Professional Studies received a grant from the university’s Office of Diversity, Equity, and Inclusion to study procurement practices in higher education, with a focus on New England.
While research indicates that large vendors account for most higher education expenditures, diverse businesses tend to be small. STATISTICS IN THIS SECTION: 58% of respondents had 10 or fewer employees. 84% had 50 or fewer employees.
What Are the Barriers?
Diverse businesses face several barriers to participation in college procurement. Two of the biggest are lack of awareness of current opportunities and lack of connection to the right decision-makers.
47% of diverse business owners lack access to either connections or information to get started as college suppliers.
Access and information are the largest barriers to supplier diversity.
Be part of the conversation on how we can #endthesuppliergap
The project team conducted a survey of vendors doing business with Higher Education Institutions between 10/26/2021 and 12/17/2021. Out of the 4447 companies contacted, we had complete data for 359 respondents from 15 different industries.